Outlook brightens for second half of 2010

The economy for the first half of 2010 will feel a lot like 2009’s, but things should improve toward the end of the year, said an economic expert.

Dr. Michael Toma, director of the Center for Regional Analysis at Armstrong Atlantic State University, pointed to three factors — the ports, tourism and consumer confidence — as being beneficial to the Coastal Empire.

“There are some green shoots of economic growth in areas that are fundamentally important to our regional economy,” he said, “not only in the region but to all Georgians.”

Toma noted that the port’s December 2009 figures were vastly improved over December 2008. The Savannah port handled 18.2 percent more 20-foot equivalent unit containers last December than in December 2008.

“There is an uptick in port activity over the last three or four months,” Toma said. “That is very good news that will drive other ancillary jobs in our area.”

The Savannah Metropolitan Statistical Area — made up of Bryan, Chatham and Effingham counties — is also seeing a rise in tourism.

“This injects income into our local economy from outside the area,” Toma said. “It’s activity that supports our economy that we’re drawing in.”

Toma also offered that he is hopeful that consumer expectations will be rebound later in the year.

“This is very important in that more optimistic consumers mean higher levels of consumer spending,” he said. “Consumption is two-thirds of all economic activity. To have optimistic consumers is very, very important to feed the demand side growth in our economy.

But raising consumer confidence may be a challenge, since consumers are being told constantly how bad things are. Consumer expectation is at low levels, Toma said.

“We’ve heard over and over and over again about how we’re in the worst economic crisis since the Great Depression. That kind of rhetoric is not helpful,” he said. “It overstates the case how bad the recession is. Don’t get me wrong — it is a severe recession. It’s one of the worst we’ve had.”

The current recession, however, is nowhere near the scale and magnitude of the Great Depression that gripped the country throughout the 1930s and into the 1940s, Toma said. Last year’s loss in gross domestic product was 3.7 percent. The GDP shrank by 3.2 percent in the 1973-75 recession and by 2.4 percent in the 1981-82 recession.

During the Great Depression, the GDP fell by 25 percent.

“The rhetoric used and layered on top of this economic climate is overstating the case,” Toma said. “It is a severe recession. The economy needs to heal itself.”

For the next few months, the economic climate will continue to be cool, according to Toma. Unemployment locally may rise above 9 percent before settling back down when job creation kicks in during the second half of 2010.

“There are some signs of growth out there,” he said. “We still will shed some jobs over the next six months. Things are looking up toward the back half of the year. That should set us up for better times in the back half of the year. If we can continue to hold on, the back half of the year is what you want to look forward to.”